Thursday, December 8

Chronology of a “looting”: the shell game between the Canarian Coalition and a multinational for the water business in Santa Cruz de Tenerife


The shell game between the Canarian Coalition and the multinational Sacyr for the water business in Santa Cruz de Tenerife continues. The Spanish company paid 59 million euros in 2006 to take over the management of the service in the island’s capital. However, during the following fourteen years he was able to recover half of that money thanks to improper returns authorized by the nationalist party in 2007, with Miguel Zerolo (today in prison for the hit by Las Teresitas) at the head of the Mayor’s Office. This year, the company has agreed to return the 33 million euros it obtained. But this recovery of money coincides with a 14% rise in the rates that citizens must pay on their bill.

How the Canary Coalition does not claim from the multinational Sacyr an alleged “plunder” of almost 60 million euros from the citizens of Santa Cruz de Tenerife

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“In relation to the rates and fees referring to the 2022 financial year, they must be reviewed and passed on to the user,” reads the agreement to which this newspaper has had access. The rate update percentage is 7.9% and the rate update rate is 6.2%. The rates and fees for the year 2023 and the following “will have to be reviewed every year.” The document contemplates another solution in case the income through this mechanism does not materialize: they will have to be compensated from the municipal budget.

It all started in 2005, when the City Council decided to privatize the management of the integral water cycle and put out to tender the public service of collection, desalination, treatment, home supply of drinking water, sewerage, purification and reuse of water. The service was awarded for 25 years to Sacyr, which offered the highest canon: 59 million euros, ten more than required in the specifications.

From that moment, he came to have 94.64% of the shares of Emmasa’s capital stock. Once Sacyr began to control almost all of Emmasa, the board of directors of the mixed company agreed to return to the parent company, that is, to itself, the canon already paid through payments of 2.3 million euros per year.

On September 26, 2022, Sacyr and Emmasa signed an agreement that establishes the conditions under which the multinational will return the money collected. According to United We Can, the company has to return 33.6 million euros plus interest within ten years. However, with the rise in the water rate, the company will enter 49 million between 2022 and 2031, the date on which the contract ends. According to the agreement, in this time frame, Emmasa will be able to recover the 33 million “plundered” through annual income of 3.3 million.

Water management, a “gift” to the multinational

The document defends that the payments to Sacyr have been an “uncontroversial” issue, but the chronology of the case shows otherwise. The injection of 59 million euros in 2006 allowed the municipal coffers to recover from the 52 that it had squandered just four years earlier due to the case of Las Teresitas, the biggest urban hit in the Canary Islands.

This network was discovered in 2018, when Emmasa demanded from the City Council an increase in the water rate for the residents of the city with the excuse of balancing the accounts of society. It was then that it was discovered that Sacyr would recover the 59 million canon, 3 million in interest, 80 million for 5.5% of Emmasa’s annual turnover and 156 more for the distribution of dividends for the benefits during the 25 years of life of the contract.

The plot came to light in 2020, during the mandate of Patricia Hernández (PSOE) after 26 years of the Canary Coalition government. The then mayor stopped payments to Sacyr when the company had already recovered 33.6 million euros. The decision was made after the legal services of the City Council, the secretary of the Plenary and the Municipal Intervention verified that there was no legal basis for this operation that turned the Joint Venture into a “gift” to the multinational.

Shortly after the socialist fulfilled a year in office, José Manuel Bermúdez (CC) snatched the Mayor’s Office from her thanks to a motion of censure presented by her party, the PP and the fugitive councilor Evelyn Alonso. Sacyr argued that the fee paid to Emmasa was a kind of “loan” for the fees for the use of the comprehensive water service assets for the following 25 years and that she therefore had to recover it.

However, a file issued by the City Council in 2020 requires Emmasa to cancel “the improperly recognized debt” with the multinational and to demand the return of the amounts paid during the term of the contract. Against this decision, Sacyr filed a contentious-administrative appeal that ended up in the Contentious-Administrative Court number 3 of Santa Cruz de Tenerife.

An agreement “between Sacyr and Sacyr”

United We Can denounced the case in court. The Investigating Court number 3 of Santa Cruz de Tenerife charged former mayor Miguel Zerolo and Pablo Abril Martorell Fernández, former CEO of Emmasa, for alleged crimes of prevarication and embezzlement of public funds.

Meanwhile, the government team of the City Council refused to act as a private prosecution. The plenary session of the corporation voted on May 28, 2021 the possibility that the government group (CC, PP and Evelyn Alonso) exercise criminal action in this case. The result was a tie at 13, so the mayor, José Manuel Bermúdez, cast his casting vote to prevent the initiative.

The PSOE took last Thursday to the Control Commission of the City Council the increase in the water rate. The main opposition party accused the government team of working for the interests of the multinational and warned that it does not rule out going to the Superior Court of Justice of the Canary Islands (TSJC) to paralyze the rise in water rates.

“It does not look like an agreement between Sacyr and Emmasa, it looks like an agreement between Sacyr and Sacyr because it exclusively looks after the interests of the multinational. Here he only loses the citizenship of Santa Cruz and his patrimonial interest, which is Emmasa”, criticized the opposition leader, Patricia Hernández. For its part, the government team assured that the refund of the canon and the increase in the water rate, although they are processed in parallel, are not related to each other.

Ramón Trujillo, municipal spokesperson for United We Can, has included the case in the “Champions of corruption” and has called it “looting” of the population of the municipality. The councilor has demanded the resolution of the contract with Sacyr for having improperly charged 33 million euros and has called the new agreement “deeply immoral” for making the neighbors pay the canon with the rise in the water rate. “How can we have a mayor who so severely harms the interest of the neighbors to favor a private company?”, He has questioned him.



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